Monthly Archives: April 2016

It has been confirmed that just 120 out of 6,500 insured depositors of FBME Bank’s branch in Cyprus have applied to the Central Bank of Cyprus (CBC) under its deposit protection scheme. This scheme pays a maximum of EUR 100,000 to each named account holder in a stricken bank – anything above this amount is lost.

Cyprus’s leading English-language newspaper, the Cyprus Mail has lashed into the Central Bank of Cyprus’s (CBC’s) handling of the FBME crisis in a hard-hitting editorial that says the CBC’s bungling could end up costing “… the taxpayer hundreds of millions”.

Writing on the American Banker website, Sharyn O’Halloran, a George Blumenthal Professor of Political Economy and a professor of international and public affairs at Columbia University, wrote that in its actions against FBME it is clear the “… overzealous FinCEN needs more oversight” from US authorities. She described FinCEN’s proposed punishments as “draconian”, and pointed to the “… glaring gaps in its administrative process and lack of substantiated claims in its pursuit of FBME, (which) suggest that FinCEN sleepwalked toward a predetermined outcome of simply wanting the institution closed”.

The employees of FBME Bank in Cyprus have gone on strike until further notice. They have walked out because of the unreasonable actions of the Special Administrator of the Central Bank of Cyprus (CBC), plus the overall behaviour and actions of the CBC and the Cyprus authorities. A statement has been issued by the employees which reads as follows:

Mr Alekos Markides, a former Attorney General of the Republic and now legal advisor of FBME Bank Ltd made two separate interventions on state radio CyBC (12 April) and MEGA Television (9 April) in response to the recent activation of the Depositors Guarantee Scheme. He claimed that the Central Bank has lacked a strategy and is now merely trying to divert attention from its mishandling of the situation. Continue reading →

Following a series of unilateral, illegal, arbitrary and irresponsible actions by the Central Bank of Cyprus (“CBC”) the delayed announcement on 9 April 2016 that the Deposit Protection Scheme is activated is a welcome move, coming some 21 months after the Resolution Authority and the CBC acted against FBME Bank Limited (“FBME”).

The Special Administrator of FBME Bank Limited Cyprus Branch has issued letters of termination to 136 employees supposedly to cut costs to safeguard deposits. The reason is, ostensibly, cost savings in order to protect depositors. Currently the Bank has capital and reserves of 162 million dollars over and above the funds available to cover all deposits and any cost saving would be deducted first from this. Accordingly, this purported cost saving has no benefit to depositors. Indeed, to the contrary, the ability of the bank to conserve its assets is adversely impacted because of the loss of staff.

Chris Iacovides, the Special Administrator of the Cyprus branch of FBME Bank Ltd who was appointed by the Central Bank of Cyprus (CBC) in January, delivered on 31 March 2016, signed redundancy notices to 136 of FBME Bank staff members in Cyprus, covering the major part of the remaining employee base of the Bank in Cyprus.